August 2016

Client Question: "What does it mean if the property for sale is a Bankruptcy sale?"

Dear What is a Bankruptcy Sale,

Every bankruptcy sale is different but there are three main things to know when considering purchasing a house or condo that is a part of a bankruptcy proceeding.

They take much longer than a traditional sale; the last one we worked on took 6 months to close

The court and the underlying lien holders can come back and increase the purchase price regardless of what you agreed to and signed around in the contract

There is a bankruptcy fee that cannot be financed into the purchase price that is typically around 5% of the purchase price that must be paid at closing as part of your closing costs (for example: if the purchase price is $500,000 the fee is an additional $25,000)

In summary, if you are going to purchase a bankruptcy sale property you want to make sure you are flexible on your time frame as it can take an undetermined amount of time that is determined by the courts. You should also have more liquid funds available to pay for the additional fee and you should be prepared to wait a long while and then have the purchase price potentially get higher, leaving you to decide if you want to pay more or walk away after all the time you already invested in waiting.

It is always great to hear that a new construction condominium building's sales center is moving into the building itself, as it indicates that the building is getting closer to be completed, allows potential buyers to see more of the final product and also means that buyer's who have already purchased will be moving into their new homes soon.

According to LUMA, the final construction details are being completed on the sales center and the furniture and art have started installation. The sales center will reopen on Saturday morning in the building!

Also, LUMA’s Rooftop Terrace is almost complete, including the fabulous looking soaking pool. The artwork install, including lightbox photos that have been placed in the lobby and throughout the corridor levels, has also begun. The lobby and amenity floor, including the cozy fireplace lounge, library and private dining room, are being outfitted with their furnishings now as well.

For sales, LUMA is now 75% sold. If you are considering purchasing in LUMA, now would be the time to check it out since you can get into the building and really get a great feeling for what it will be like to live in First Hill's newest condo community.

The City of Seattle is having a project review for this building tonight and if the design board approves the project, the developer, Stanford Hotels, would like to break ground immediately. The layout of the tower in terms of where the residential units and hotel rooms are located within the building is interesting. Retail will be on the main level along with hotel valet, then above and below that are several levels of parking. Then on level 6 would be the residential lobby and several residential amenities, which continue onto the 7th floor. The residential units begin on the 7th floor and go through the 30th floor. Then you will have hotel guest rooms from floor 33 through 43. On top of the hotel rooms you would then see the upper floor residential units taking up floors 44 to 48. Floor 49 would house the hotel amenities and floors 50 and 51 would have the hotel lobby, bar and restaurant (which would of course be a public space). Topping off this massive tower is the rooftop bar, also a hotel amenity. Not sure how residents of this tower will feel about the highest floors with the best views being public hotel spaces but only time will tell.

For now, Stanford hasn't decided whether or not to lease the residential units as apartments or sell them as condos so we will monitor this project and let you know any news as soon as we hear it.

Insignia has just announced that they are 95% sold in both towers combined, leaving them with fewer than 30 homes left.

If you are looking to live in Downtown Seattle in a new construction high rise and want to move in this year, these are the remaining options for you along with any resale units that come on the market in Insignia. After that, you would have to wait for NEXUS which will not be complete for years to come.

With the north tower complete and starting move-ins the building is starting to feel more like a lived in community. It also means that the amenities in that tower including the recently completed 75’ pool, spa, steam room and sauna and now available for residents to use and are available to check out if you are considering purchasing one of these last homes.

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About the Authors

Marco Kronen is the co-author and a condo Realtor. He and Wendy have worked together serving clients in Seattle since 2007. Feel free to contact Marco here.
Wendy Leung is the founding editor of the Seattle Condo Review. She's also a full-service Seattle realtor.